Apple has threatened to take legal action against a little-known Chinese firm for inflaming an ongoing dispute over the iPad trademark, alleging that the company's founder and its lawyers have made misleading statements that could damage the U.S. tech giant's business in China.

On Monday, Apple sent a letter to Chinese display vendor Proview, demanding its founder Yang Rongshan cease releasing what it said was false information to the media. Apple then warned it would sue for damages caused by "defamatory statements."

"It is inappropriate to release information contrary to the facts to the media, especially when such disclosures have the effect of wrongfully causing damage to Apple's reputation," said the letter, which was provided by a person familiar with the matter.

The companies have been locked in a legal battle to decide who owns the iPad trademark in mainland China, with Apple claiming Proview sold off the trademark rights in 2009. Proview, however, argues it never officially sold off its ownership of the iPad trademark, and is now demanding Apple stop its sale of its tablet in the country.

Monday's letter was sent just days after Proview's founder Yang held a press conference and said the trademark rights were never transferred because Apple had bought them from a Taiwan subsidiary company, and not from Proview itself.

Yang further said at the time that he was unaware the Taiwan subsidiary had sold off the iPad trademark rights for mainland China, and that the subsidiary never had the permission to do so.

Apple's letter, however, contends that Yang knew the trademark talks had taken place, citing emails that were exchanged between Proview and a U.K.-based company set up by Apple to acquire the iPad trademark rights. The letter adds that Proview's own headquarters negotiated and accepted the offer to buy the trademark for APS35,000 ($55,000), with Proview promising to make the transfer.

Apple's threat of further legal action comes after Proview has filed its own lawsuits and complaints to request Chinese authorities ban the sale of iPads in the country. On Monday, a Chinese court ruled a local electronics vendors in the country would have to halt the sales of the tablet because of trademark infringement, according to a lawyer with Proview. A Proview representative said on Friday it would drop all legal action if Apple pays US$400 million in compensation.

Apple spokeswoman Carolyn Wu offered no new comment. The company is appealing a December court decision in Shenzhen, China that rejected its claims to the iPad trademark.